The ability of creditors to discipline the risk-taking behaviours of borrowing banks represents a long-lasting debate. This debate gained new attention after the post-crisis stream of reforms concerning resolution policy: creditors should have incentives to engage in optimal monitoring of their borrowers. Many commentators criticised such an expectation, especially in the European context, arguing that the lack of credibility and excessive complexity of the resolution mechanism impair the ability and willingness of creditors to exert a disciplining role. This chapter finds that the design of the Directive inherently impairs the disciplining activity of bail-inable creditors. To do so, this chapter reviews the literature on Market Discipline, then carries out a legal analysis of the Bank Recovery and Resolution Directive (BRRD), focusing on those norms shaping the market for bail-inable securities. According to the existing literature, in an ideal environment where resolution is fully credible, creditors should have optimal incentives to monitor banks’ behaviours. This chapter discusses the rules shaping the incentives of bail-inable creditors and shows that the legal design of the BRRD prevents itself an efficient level of market discipline from bail-inable creditors. The analysis highlights that the BRRD legal design inherently dilutes the incentives of creditors towards market discipline because of competing policy objectives pursued by the Directive. The direct normative consequence of such a finding is that enhancing information and predictability, though desirable in principle, cannot lead to optimal monitoring efforts, leaving the floor to alternative rule-based strategies. This chapter is structured as follows. Section 1 sets the stage for the analysis. Section 2 defines market discipline in the context of banks relying on the relevant economic theories and their regulatory implications. Section 3 discusses the post-crisis regulatory environment for recovery and resolution of distressed banks in Europe. Section 4 analyses the norms shaping the legal status of bail-inable creditors. Section 5 sets the necessary assumptions for the incentive analysis of the BRRD legal design and conceptualises the rules on creditors’ treatment in terms of ex-ante monitoring incentives. Section 5 defines the baseline incentive structure (5.1) and analyses the impact of “external shielding” mechanisms, specifically of the No-Creditors-Worse-Off Rule (5.2.1) and the rule on the possibility of granting public aids after the bail-in (5.2.2), showing how they dilute the incentives towards the monitoring of the investors. Section 5.3 provides anecdotal evidence supporting the findings of the research. Section 6 concludes.